Styrolution further strengthens its PS business in North America

MOSCOW (MRC) -- In order to further strengthen its polystyrene (PS) business in North America, Styrolution has announced it plans to consolidate PS capacity in the region, reported the company in its statement.

In addition, Styrolution will accelerate growth in styrenic specialties through an expansion of its offering for high-performance transparent styrenics, by providing local supply in Europe, the Middle East and Africa (EMEA). Part of Styrolution's Triple Shift growth strategy, these measures will further enhance the company's position as the global leader in styrenics.

Thus, in order to strengthen the long-term economic sustainability of Styrolution's polystyrene business in North America, the company plans to mothball its PS plant located in Indian Orchard, Massachusetts by the end of the year. This comes following years of overcapacity in the North American PS market which have also impacted Styrolution, making it necessary for the company to take action to secure this business for the future. The plant accounts for 150,000 t (330 million pounds) of PS production capacity. The company will continue to serve the North American PS market from its best-in-class plants in Decatur and Channahon, USA and Altamira, Mexico with the same quality, reliability and delivery standards customers have come to expect from Styrolution.

Also, by the end of third quarter of 2014, Styrolution will commence production of high-performance transparent specialty, NAS (SMMA) at the company's plant in Ludwigshafen, Germany. Currently, NAS is supplied to the EMEA region from Indian Orchard and compounded locally into the transparent product Zylar. NAS to be produced at Decatur, Alabama site. Styrolution plans to shift NAS production from Indian Orchard, Massachusetts to its site in Decatur, Alabama where the company will convert a general purpose polystyrene line into a swing line to also produce NAS. The transfer of NAS production from Indian Orchard to Decatur is expected to be completed by the end of the third quarter, 2014.

Besides, Styrolution is committed to providing customers additional supply options for both specialty and standard products from at least two sites. Offering local supply of NAS and Zylar in EMEA and the Americas is one of several expanded supply options announced over the past 18 months. These options include availability of Luran S grades from Styrolution's Ulsan, South Korea, Altamira, Mexico and Ludwigshafen sites; AMSAN-based, high-heat (HH) products, such as Luran HH and Novodur HH grades from the company's sites in Altamira and Ludwigshafen; and a proposed joint venture with Braskem to produce ABS and SAN specialties in Brazil.

Thus, Styrolution's Triple Shift growth strategy, calls for a focus on styrenic specialties and Standard ABS, emerging markets and higher-growth industries. The initiatives announced strengthen Styrolution's global position in styrenic specialties while improving production efficiencies for polystyrene in North America.

As MRC wrote earlier, in December 2013, Styrolution announced measures to better serve customers in Europe, the Middle East and Africa (EMEA). New initiatives include the optimization of Styrolution's production network in Germany and the opening of a regional specialties logistics center. These measures enable Styrolution to offer customers greater flexibility, long-term and secure supply, and lot-to-lot consistency. They also extend Styrolution's regional reach and further strengthen its leading market position in the region's key focus industries, such as automotive, healthcare and diagnostics, and building and construction.

The Styrolution Group GmbH is a global provider of styrenics , headquartered in Frankfurt am Main. The company is a joint venture between BASF (50%) and INEOS (50%), were merged into the main styrene operations of the two partners. Its main focus is on the production of monomer, polystyrene, styrenic specialties, and ABS. The company offers styrene plastics for a variety of everyday products from different industries, such as automotive, electronics, construction, household, leisure, packaging, medicine and health.
MRC

MOSCOW (MRC) -- SIBUR, the giant Russian petrochemicals company, 57.5% controlled by Russian billionaire Leonid Mikhelson, has reached an agreement with state owned Russian oil company Rosneft to acquire its’ 49% interest in their Yugragazpererabotka gas processing joint venture, reported the company on its site.

The interest has been held by Rosneft-owned RN-Holding, formerly TNK-BP.

The terms for the purchase of the Rosneft stake were not disclosed but analysts estimate the price may be in the range of between USD1-2 bln.

After the deal closes SIBUR will own 100% of the venture, and will continue to have access to guaranteed gas supply from Rosneft of up to 10 billion cubic metres/year of gas as feedstock for their plants under a new supply agreement now extending to 2032. The sale of the plant, which processes gas co-produced at some of Rosneft’s oil fields, known as APG, which stands for associated petroleum gas, will be among the first sale by Rosneft of assets it picked up in the USD55 billion acquisition of the TNK-BP joint venture last year.

Dmitry Konov responded: "By signing the agreement with Rosneft to increase associated petroleum gas supplies, SIBUR reaffirms its commitment to the corporate strategy of securing long-term access to feedstock. The extended tenor of the APG contracts highlights the strong ties between Sibur and Rosneft, which remains the key APG supplier for Sibur’s gas processing facilities."

As MRC informed before, SIBUR has recently sold its 100% stake in OJSC Plastik (Uzlovaya, Tula Region, Russia) to the group of private investors. The deal value totalled RUB 575 million. Production of geosynthetics (geogrids and nonwoven geotextiles), spinned off as OOO Plastik-Geosintetika (a joint venture between SIBUR and Leader Innovations Closed-End Venture Capital Fund) in 2010, was not included in the transaction and continues to operate as part of SIBUR Group.

SIBUR is a vertically integrated gas processing and petrochemicals company, which operate Russia's largest gas processing business in terms of associated petroleum gas processing volumes and are the leader in the Russian petrochemicals industry.
MRC

MOSCOW (MRC) -- BASF, the global petrochemical giant, has increased sales and earnings in 2013 compared with the previous year, said the company in its report.

"2013 was again a demanding year, with a lot of headwind for our industry. Nevertheless, we achieved our goal: We sold more, worked more closely together with our customers and enhanced our portfolio," said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE at the Annual Press Conference in Ludwigshafen.

Sales of BASF Group in the fourth quarter of 2013 were EUR18.1 billion, slightly above the same period of the previous year. Volumes increased in all segments. Sales prices were slightly lower overall in the fourth quarter; negative currency effects lowered sales in all divisions.

For the full year, sales rose by just under 3% to reach EUR74.0 billion. A considerable, mainly volumes-driven sales increase in the Oil & Gas and Agricultural Solutions segments was largely responsible for this development. Sales slightly declined in the chemicals business, which includes the Chemicals, Performance Products and Functional Materials & Solutions segments, despite higher sales volumes. This was mainly on account of negative currency effects. EBIT before special items in 2013 rose by EUR543 million to EUR7.2 billion. In addition to the successful business with crop protection products and a higher contribution from the Functional Materials & Solutions segment, this increase was also due in large part to the earnings improvement in Other.

Net income amounted to EUR4.8 billion, slightly above the previous year’s level.

"At EUR7.9 billion, operating cash flow reached a record level," said Dr. Hans-Ulrich Engel, Chief Financial Officer of BASF.

"We do not expect strong tailwinds this year either. Nevertheless, we are cautiously optimistic with regards to global economic development. The world economy is expected to grow slightly faster in 2014 than in 2013, despite continuing volatility," said Bock. For the global chemical industry, the company anticipates growth rates comparable with the previous year’s level and forecasts somewhat higher growth in key customer industries such as the transportation, consumer goods and electronics industries. This will likely have a positive effect on BASF’s business.

For 2014, BASF assumes the following economic conditions (previous year figures in parentheses): global economic growth: +2.8% (+2.3%); growth in global chemical production (without pharmaceuticals): +4.4% (+4.6%).

We remind that, as MRC wrote previously, BASF has recently signed a contract to divest its liquid masterbatch business in Clermont de l’Oise, France, to Audia International, a large global supplier of polyolefins and color masterbatches. The transaction is expected to close in mid 2014. The parties have agreed not to disclose financial details of the agreement.

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas.
MRC

MOSCOW (MRC) -- Shenhua Ningxia Coal Industry Group has restarted two polypropylene (PP) lines following maintenance turnaround, reported Apic-online.

A Polymerupdate source in China informed that the two plants restarted on February 24, 2014.

Located in Ningxia Hui autonomous region, the plants have production capacities of 200,000 mt/year and 300,000 mt/year respectively.

As MRC informed previously, Shenhua Ningxia Coal Industry Group shut its PP plant for a maintainence turnaround. The plant was taken off-stream on October 27, 2013 for around 10 days. Located at Yinchuan city, Ningxia in China, the PP plant has a production capacity of 500,000 mt/year.

Another Chinese petrochemical producer - Daqing Refining & Chemical restarted its PP plant last weekend. It was shut for a maintenance turnaround. Located in Heilongjiang province, China, the plant has a production capacity of 300,000 mt/year.
MRC

MOSCOW (MRC) -- BP dropped plans to invest in a refinery in China and “dismantled” a team assigned to the project late last month, said the International Energy Agency, said Hydrocarbonprocessing.

BP had considered investing in the 200,000 bpd Qinzhou plant operated by PetroChina, according to the IEA, an energy adviser to developed nations. The refinery in the southern province of Guangxi started operations in 2010 and is currently being upgraded to handle a wider range of feedstock, it said in its monthly Oil Market Report.

David Nicholas, a BP spokesman in London, declined to comment on the report.

Chinese and international oil companies are reconsidering their refinery-investment plans as the Asian nation’s oil consumption expanded at the slowest pace in six years in 2013, according to the IEA. About 4.3 million bpd of primary distillation capacity was scheduled for completion by 2018, "by far exceeding" demand projections, it said.

"Growing concerns over the risks of oversupply in the Chinese fuels market have led at least four projects to be canceled in recent months," according to the report.

PetroChina’s plans to build a refinery and petrochemical complex in east China with Royal Dutch Shell and Qatar Petroleum stalled last year amid land issues.

China’s biggest oil producer also delayed two new refineries originally scheduled to start operations this year, data from CNPC, the parent company, showed on Dec. 12. The Kunming plant, with a crude-processing capacity of 10 million tpy, will begin operations in 2016 while the Jieyang facility, a joint venture with Venezuelan state oil company Petroleos de Venezuela (PdVSA), has been postponed to 2017.
MRC